Understanding Stack Fallacy: Why Companies Fail When Expanding to Adjacent Markets
By
bobbiechen
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Summary
The article discusses the concept of "stack fallacy" - the mistaken belief that it's trivial to build the layer above your current expertise or product. It explains how this fallacy causes companies to fail when attempting to enter new markets, using examples like database companies thinking apps are easy or VM companies thinking big data is easy. The piece draws parallels to how mathematicians might believe all physics is just applied math, illustrating the cognitive bias of underestimating the complexity of adjacent domains.
Key quotes
· 4 pulledStack fallacy is the mistaken belief that it is trivial to build the layer above yours.
When you see a database company thinking apps are easy, or a VM company thinking big data is easy — they are suffering from stack fallacy.
Stack fallacy has caused many companies to attempt to capture new markets and fail spectacularly.
Mathematicians often believe we can describe the entire natural world in mathematical terms. Hence, all of physics is just applied math.
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